Investors pull away from property market

 

Investor home loans dropped to a two year low in April.

Figures released by the Australian Bureau of Statistics show mortgage commitments to investors fell 0.9 per cent in seasonally adjusted terms in April 2018 to $10.75 billion, down from $10.85 billion in March.

This was the lowest level since January 2016.

The number of loan commitments was down by 1.4 per cent, seasonally-adjusted.

Owner-occupier borrowing was flat rising 0.2 per cent.

The figures show the proportion of borrowing by investors has fallen to a six year low of the 42 per cent. This the lowest since January 2012.

The only segment of the market that grew during this period was first home buyers with the number of first-home buyers’ loans growing to 17.6 per cent of all owner-occupier mortgages, up from 13.7 per cent in January 2016.

However, the number of loans to first-time buyers has fallen from its peak in November last year. Finance approvals for first home buyers in New South Wales and Victoria are down 8 per cent from the November 2017 peak.

Lending standards are expected to tighten in the fallout from the Royal Commission into banking and financial services.

“The stamp duty discounts for first home buyers across New South Wales and Victoria are still assisting some buyers, but the effect is waning,” ANZ senior economist Daniel Gradwell said.

“Looking forward, tighter credit conditions are likely to continue to bite, suggesting that housing finance will remain soft for some time yet.



An award winning author and journalist, commentator, lecturer, and speaker, Leon is a freelance business journalist who covers a range of areas including politics, strategy, globalization, leadership and all the big trends ahead. His main skill is summing up all the news that’s around. For the last 30 years, his main focus has been on management issues. He also produces two podcasts for RMIT University, Talking Business and Talking Technology. Leon has worked for Fairfax, News Limited, AAP and the Herald and Weekly Times.


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